Run Away From All Those Taxes!

We’re frequently asked, “Why haven’t you moved your residency to a state with no income tax, like South Dakota, Alaska, Nevada, Florida, or Texas?” The simple answer is, “We are North Carolinians!” We are willing to pay to enjoy North Carolina’s fabulous scenery, people, services, universities and community colleges, and interesting geography from mountains to seashore.

The rest of the story is, income tax should be only a small part of why someone might choose to change their residency. There are seemingly countless taxes to consider, and what affects me might be irrelevant to you and your economics. It can be complicated.

Zero or low sales tax sounds pretty great. We aren’t spendy, though. And the break on sales tax only accrues to you when you are buying in your wonderful state of, for example, Oregon, Alaska, Delaware, or New Hampshire. Mobile lifestyle folks like us would likely not benefit often enough to warrant moving to a state for their low or no sales tax.

State excise taxes impact mobile folks similarly to sales taxes. You are impacted only when you are locally purchasing the burdened service or goods, like gasoline, candy, beer, wine, liquor, or cigarettes.

Other tax considerations include property, estate and inheritance, and corporate income taxes. You can go through the items for the short list of states you might be considering. Using your income and habits you can work out the probable taxes you would face. It’s not rocket science to determine which states would be good or poor choices for you.

Fortunately, there are pamphlets available with most of the relevant tables you would need for comparing states. I was browsing the internet this evening and came upon one you can download. It provides a choice of PDF or Excel, you can go to this link to select. I thought you might enjoy looking at it. It has 40 tables regarding US states taxes. I enjoyed leafing through the PDF booklet, and you might also.

An employee once scoffed at all the local taxes I was paying to live near my job. He ran away from the taxes by living in the sticks. My taxes paid for the local roads he used, supported the public services we relied upon, and helped make our community what it was. We chose to live in the town not only for employment but because we liked that town. We were willing to pay to live there.

We aren’t very likely to run away from our home state to try to find a better deal on some category of taxes. Our taxes are low because our income, owned property, and spending are low. The pamphlet does not seem to address vehicle registration and inspection costs, nor does it include the very fluid and confusing costs for health care insurance and vehicle insurance. It’s complicated, isn’t it?

We might find another state with taxes lower overall for our particular set of circumstances. But we aren’t interested in running from our taxes. We are North Carolinians, proud of it, and willing to pay for it.

Late edit — I found this cool table after I had saved the above post. Instead of only having it in the comments, I thought it would be more helpful to show it here too.

California is such a great territory. A great place to visit, so much to see and learn and eat. We really love being there. I think we might run too — I didn’t elaborate so much, but NC ranks middle to lowest third in many of the tax burdens. Granted, this may mean we also don’t have available the same level of services of some more taxing U.S. states. It’s a matter of priorities. If we could live on the beach at Dana Point in southern Cal, it would be worth the wacky government and taxation. In the same vein, you and many of our friends are now from South Dakota and are relatively unconcerned about the level of services S.D. extends to you. In fact, less is more — right?

As a full-timing family and traveling therapist, paying state income taxes is one of many conciderations on the road. As Texans, we do not have to pay the state; however, working in Arizona I do. Eventhough I’m not a resident in Arizona. I respect the issue of loyalty to the state inwhich you own propery. It is a whole other issue for those of us that do not own property and are required to have a physical address for health insurance, vehicle registration, banking, and much more. Registering a car in Texas -vs- Arizona or California is a no brainer (as long as you’re ok visiting Texas once a year). If RVing on the West coast sounds good, it may not make finacial sence to reside 3000 miles away on the East coast. Unfortunately, choice of residency is limited to a hand-full of states when concidering an RV friendly mail service that can meet full-timing needs. Make a list of your needs, research your state taxes and others (4% sales tax difference (PA -vs- OK) on your next RV purchase can make a bigger dent in you wallet), and check it twice before changing residency. Just a thought:-). See ya on the road!